Real GDP grows when I. the quantities of the factors of production grow
II) persistent advances in technology make factors of production increasingly productive
III) human capital grows

Question

Quizplus · Accepted Answer

Real GDP grows when there is an increase in the quantities of the factors of production such as capital and labor (I). It also grows when there are persistent advances in technology that make factors of production increasingly productive (II), and when the quality of the labor force increases through improvements in education and training, which is known as human capital (III). Therefore all three factors contribute to real GDP growth.

Real GDP Grows When I